Santos and Oil Search companies have reached an agreement on the merger ratio mentioned in the Revised Merger Proposal, a press release issued by Santos stated.

According to the proposal, Santos will own approximately 61.5% and Oil Search will have approximately 38.5% of the merged group. This will occur when Oil Search shareholders receive 0.6275 new Santos shares for each Oil Search Share.

The Revised Merger Proposal implies a transaction price of $4.29 per Oil Search share, based on the closing price of Santos and Oil Search shares on 19 July 2021.

According to the statement, this merger will enable the two companies to have a diversified portfolio of high quality, long-life, low-cost assets across Australia, Timor-Leste, Papua New Guinea and North America as well as combining their production to become 116 million barrels of oil equivalent.

Santos Managing Director and Chief Executive Officer Kevin Gallagher said that the potential merger of Santos and Oil Search is consistent with Santos’ disciplined strategy to grow around their core assets.

“The merged company would have strong cash generation from a diverse range of assets which provides a strong platform for sustainable growth and continued shareholder returns. The merger also builds on our industry-leading approach to ESG through the combination of Santos’ net-zero 2040 pathway, including its sector-leading CCS projects, and Oil Search’s unique social programs in PNG, underpinned by a strong balance sheet to fund the transition to a lower carbon future,” Gallagher added.